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Health Care Reform: Four Companies That Are Leading Change

This week, Kathy Gersch, my Kotter International colleague, highlights four companies in the health care sector that are not waiting for a Supreme Court decision to transform their businesses.

The Supreme Court is set to rule on key provisions of the Affordable Care Act before the end of this month. With so much uncertainty around the future of the U.S. health care system, many companies have long been frozen, taking a “wait-and-see” approach to change, choosing to sit tight until the future becomes clearer.

But in a rapidly changing world, sitting tight can spell disaster.

“A leader of a large health care organization’s challenge is to play offense, not defense,” John Kotter wrote on this blog last summer. “If I were running a hospital… I would be focused on how do we make some significant change to take advantage of the opportunities that are going to be inevitable with this swirling, difficult, changing environment in health care.”

John is exactly right. And in the last few weeks alone, a number of hospitals and other health care providers have heeded his call and are taking drastic action.

The New York Times recently profiled one hospital in Brooklyn, New York — Maimonides Medical Center — whose leaders echoed John’s sentiments: “Win, lose or draw in court, administrators said, the policies driving the federal health care law are already embedded in big cuts and new payment formulas that hospitals ignore at their peril. And even if the law is repealed after the next election, the economic pressure to care differently for more people at lower cost is irreversible.”

With “value-based purchasing” programs mandated by the Affordable Care Act, where hospitals will be judged based on both cost and quality of care, Maimonides is taking major steps to boost patient satisfaction. As the Times reported, Maimonides “asked labor-management teams in every unit to invent their own improvement projects. In one initiative, nurses are making hourly rounds to offer patients extra help.” The hospital also provides valet parking and free Wi-Fi — certainly not business as usual.

Elsewhere in New York City, two of the largest hospital systems — NYU Langone Medical Center and Continuum Health Partners — are joining forces to boost their bargaining power with insurance providers and to cut costs, partly as a result of efficiency mandates outlined in the health care reform bill. Again, this is an example of medical organizations taking matters into their own hands and transforming the dynamics of the health care system, rather than allowing change to simply happen to them.

Insurance companies are also changing. As Aetna CEO Mark Bertolini explained to the Wall Street Journal last week, “If the Affordable Care Act were to go away tomorrow, we still would be better off as an organization, because who can argue with getting a lower health care delivery cost, more streamlined administrative structure, making yourself simpler and less complex to do business with? If that all happened and then health care reform went away, we would be better off and so would our customers.”

The leaders of UnitedHealthcare seem to agree. They made news recently when they pledged to keep popular coverage provisions mandated by the Affordable Care Act in place, regardless of the Supreme Court’s decision. The company said it would continue offering policyholders no-copayment preventative services, and third-party appeals for cases where treatments are denied. They also vowed, among other things, not to cancel policies retroactively, except when fraud had taken place. These are marked shifts in the way insurance companies typically operate.

In each of these examples, leaders are refusing to let complacency set in. They are not resting on their laurels, being myopic or tricking themselves into thinking that the old way of doing things will suffice in the future. The world is changing quickly, and those who fail to change with it are sure to be left behind. The winners will be in front of the transformation instead of behind the curve trying to catch up when things become “clear”. One thing is certain – change in healthcare will continue, and it’s accelerating. There is no point of perfect clarity.

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We can not continue to borrow other nations money, to continue with our unsustainable National Healthcare Expenditures (i, e, 16-17 % of us GDP).

We must used the current Healthcare Reform Law as a foundation, to form a 50/50 Joint Venture of Government and Private Sector Investments, and used this fund to form a National INFRASTRUCTURE BANK. This Funding can be used to Build an Intelligent Network Infrastructure (a Network of Networks.) The Deployment of this Network of Networks can be a pure Packet-based, all Optical/IP, Multi-Service, using Optical Ethernet, for this National Network.

THE ENGINE OF ECONOMIC GROWTH IN THIS 21ST CENTURY IS “BROADBAND SERVICES.”

In additional to New Jobs Creation, this “Network of Networks”, can Served as a BUSINESS DRIVER for: e-Healthcare, e-Government, e-Commerce, e-Education, Law Enforcement National Network, Social Networking, Entertainment, etc.

If, properly implemented, one of the benefits of this Network of Networks in term of Healthcare Services, is, it will increased Productivity (i, e, medical data mining/warehousing, risks treatment, service delivery), Efficiency (i,e, medical errors, redundant and inappropriate care), and still provide us a Cost Savings of around 20-30% of our National Healthcare Expenditures (i, e, in 2010 $2.8T).

This Investment is like the Investments made in the past in, ERA, TVA, the National Transportation Inter-State Highway, which increased Productivity and our GDP

I would question the motivation on these so called strategic moves. 1)UnitedHealthcare is giving away ice in the winter. As long as they can stay in the game by taking over more of the government programs (medicare and medicaid managed care) ,they will continue to deny cases for administrative reasons and improve their bottom line. 2)the merger of nyu and continuum is given the spin by these two medical centers that it will improve quality and reduce costs. Or is really to preserve and grow payment rates based on leveraging their size?

I think you need to dig a little deeper than reporting from other news sources..

In addition to these four companies that are leading change, several smaller companies have emerged with the goal of changing the way health care is “consumed”. These companies are providing patients a self-service platform and are attempting to decrease the cost of care. The influence from these smaller companies are pressuring some of these larger companies to adapt to a shifting landscape and a more knowledgeable customer/patient base that are willing to shop around for services.

Is this some kind of a joke? As if any of these supposedly bold, innovative, inspiring changes that supposedly demonstrate “leadership” would have happened without the Affordable Care Act mandating them in the first place. Let’s not forget that the insurance companies getting all this credit for trumpeting these policies secretly spent more than $100 million to fight passage and implementation of the law.

The entire premise of this column — especially the idea that the guest author’s boss is a visionary for somehow advising this behavior — is ridiculous and offensive. Forbes should reconsider its relationship with this contributor and his corporate minions.

The major point not to be missed here is all about acting today. No matter how one feels about the Affordable Care Act, the health care industry or any of these specific companies, the major lesson here is that you cannot wait to accelerate the pace of your own organization’s strategic response to an ever-changing marketplace. We are not endorsing any particular strategies—including any of the approaches mentioned in this article—but what is critical is that organizations do not become paralyzed by uncertainty. Instead, they must forge ahead and capture the opportunity that change presents with new strategies and take the future into their own hands. Our previous coverage of the Kodak bankruptcy is a case in point: unlike the four companies discussed here, Kodak allowed complacency to set in, it remained stuck in its old ways, and the company suffered for it.

In a rapidly changing world, organizations must be willing to transform themselves in order to have a chance to succeed.